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Business News/ Economy / The Right Amount of Cash to Keep at Home for Emergencies. Hint: Not $480,000
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The Right Amount of Cash to Keep at Home for Emergencies. Hint: Not $480,000


Credit cards and mobile apps won’t pay for much in a power outage.

People storing a significant amount of cash should protect their money from theft, fire and flooding.Premium
People storing a significant amount of cash should protect their money from theft, fire and flooding.

So, just how much cash should people keep at home in case of an emergency?

When the question was put to more than a dozen advisers and disaster-preparation experts, the answers ranged from $200 to more than two weeks’ worth of expenses. Though it is personal-finance gospel to save an emergency fund of three to six months of expenses, advisers say money should be collecting interest, not dust at the back of your sock drawer.

There was some consensus: Few, if any, Americans need to stash anything near the $480,000 in cash investigators found in the home of Sen. Bob Menendez (D., N.J.), which he said was for emergencies.

Those who live in areas prone to hurricanes, wildfires, snowstorms and power outages might need to hold on to more cash than others, said Paul Auslander, a financial adviser based in Clearwater, Fla.

“Here in Florida, you tend to keep enough cash on hand to get through two to four weeks of no ATMs and electrical power failure sufficient to keep your credit card from working at a grocery store," Auslander said.

How much cash will you need

To prepare for a natural disaster or other emergency, the Department of Homeland Security tells Americans to stash water, food, flashlights and batteries at home. Cash is optional.

William Bernstein of Efficient Frontier Advisors, who wrote books on investing, disagrees.

“After a disaster damages your house or appliances, the repair person is likely to give priority to customers who can pay in cash," he said.

John Ramey, founder of The Prepared site, which offers courses on emergency preparation, recommends people keep enough money on hand to survive for at least two weeks without cards and access to bank accounts, and to build up a stockpile from there.

“That means two weeks of hotel and food, or two weeks of rent," he said.

People shouldn’t hoard cash at the expense of paying down debt and getting their finances in order, Ramey added.

How to protect your cash

Though a few hundred dollars might be kept in a wallet or desk drawer, those storing thousands of dollars in cash should protect their money from theft, fire and flooding.

This typically means putting the money in plastic bags in a safe rated for fire resistance.

Ramey suggests applying a portfolio approach to securing one’s cash. “I wouldn’t want all my cash in one safe," he said. “Have a safe, sure, but also something hidden in plain sight—a Barbasol can with a fake bottom or a decoy wallet."

Keeping too much cash at home could raise the interest of thieves and authorities, saidJoshua Escalante Troesh, a financial adviser in Rancho Cucamonga, Calif.

“As the senator is finding out, when you have that large amount of money, there is a huge question about why you have that amount of money," he said.

Aside from the risk of theft, stashing cash in a variety of places around the home can create the need for a treasure map of sorts, and some way to communicate the locations to friends or relatives.

“If you have cash lying around in different locations of your home, how do you keep track of all those amounts?" said Avani Ramnani, financial planner in New York City.

And depending on the nature of the disaster, cash might diminish in importance, said Ramey.

“In ‘The Walking Dead’ scenario, you are going to be trafficking beans, not gold bullion," he said.

Veronica Dagher contributed to this article.

Write to Anne Tergesen at and Jeremy Olshan at

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